The reward structures associated with credit cards make them a compelling purchase as we grow older. Some even list a credit card investment as a necessary part of adulthood. This symbol of adulthood should not, however, be taken lightly. Credit cards have the power to trap us in debt if the monthly dues are not paid on time. Making your credit card bill payments on time is a very tiny price to pay to procure the myriad benefits that are dispensed to you under the ownership of this card. To help you understand the benefits extended by credit cards, we cover all the advantages that come with the ownership of this plastic card.
- Credit Access
Rather than applying for a loan, applying for a credit card is one of the greatest advantages you can get as a credit cardholder. It provides you with easy access to the usage of credit. In an urgent financial situation, using your credit card provides you with the facility to pay for the attainment of a product, and pay back the amount you borrow later. Your credit usage does not show up in your monthly bank statements either. This instant access to credit may adversely impact you if you end up using your credit card more than you can afford to pay back later on. But with the grace period that is given to every credit cardholder, you have more than a sufficient amount of time to pay back the amount you have borrowed.
- Cashback Facility
The biggest advantage of credit cards stems primarily from the reward structure associated with these cards. Cashback, in specific, provides an individual with the facility to get their cash refunded based on the sum involved in the transaction they make. Even a mere 1% cashback goes a long way for small businesses and start-up enterprises.
- Credit Score Improvement Tool
By merely paying your monthly credit card bills on time, you can improve your credit score over a period of time. This will aid you in the future to easily qualify for loans or other credit cards you wish to procure under your name. It will also help you live in a rented apartment or purchase an apartment in certain countries, as credit scores are sometimes used as a tool of assessment for accommodation provision. Credit cards also come with monthly credit card statements that get emailed directly to you, so that you can keep track of your daily expenses. This helps you to become a credit accountable — and overall financially responsible individual.
- Equated Monthly Instalments (EMI) Provision
Credit cards come with an EMI provision that lets you pay for the product you wish to attain in the form of affordable monthly instalments. This will let you earn the total amount of the product over a period of time, and pay for the product in small, monthly payments. Paying via the EMI facility works out a lot cheaper than paying for the product via a loan. It will also prevent you from tapping into your savings account to pay for a product in one go. The Bajaj Finserv RBL Bank SuperCard, for instance, provides its owners with EMI provisions that make every purchase a lot more convenient.
- Reward Points
Another advantage of a credit card is its reward point accumulation facility. With this facility, you can accumulate a certain number of reward points after each transaction you make. Later on, you can use these aggregated reward points to purchase an item of your choice depending on how many points you have gathered. The points can be redeemed for travel, dining, retail outlet shopping and gift card purposes, among others.
- Interest-free Periods
Certain credit cards provide interest-free periods to the cardholders that let you borrow credit without having to worry about paying interest. This is mostly provided to individuals who have maintained a history of paying their credit card bills on time. It is also provided to individuals as part of the feature list of credit cards, or as a complimentary gift for paying the joining fee.
- Purchase Protection
Certain credit cards come with insurance, in case you lose your credit card or it gets damaged. This makes it worth the money you spend on such cards. Such benefits do not always come with debit cards. Specific credit cards also come with other insurance coverages that extend to travel accidents. This works out in the favour of corporate credit cardholders. Building on protection, this card is also better than debit cards because of its lack of a direct money deduction from your account. In case your debit card is swiped by someone else, the amount is directly deducted from your personal account. This, however, is not the case with credit cards.
These are some of the major benefits of owning a credit card. Different credit cards offer unique benefits to cardholders. If you’re thinking about getting a credit card, you might want to look into the Bajaj Finserv RBL Bank SuperCard, which comes with the power of four cards all wrapped into one.